Create a formula

Formulas are equations that perform calculations on values in your worksheet. A formula always starts with an equal sign (=).

You can create a simple formula by using constants and calculation operators. Simple formulas can include values you enter, cell references, or names you have defined. For example, =A1+A2 or =5+2 are simple formulas that add the values in cells A1 and A2 or the values that you specify.

You can also create a formula by using a function. For example, the formulas =SUM(A1:A2) and SUM(A1,A2) both use the SUM function to add the values in cells A1 and A2. In addition to formulas that use a single function, you can create formulas with nested functions or arrays that calculate single or multiple results.

Learn about the parts of a formula

Depending on the type of formula that you create, a formula can contain any or all of the following parts:

Functions A function, such as PI(), starts with an equal sign (=), and you can enter arguments for the function within its parentheses. Each function has a specific argument syntax.

2. Cell references You can refer to data in worksheet cells by including cell references in the formula. For example, the cell reference A2 returns the value of that cell or uses that value in the calculation.

3. Constants You can also enter constants, such as numbers (such as 2) or text values, directly into a formula.

4. Operators Operators are the symbols that are used to specify the type of calculation that you want the formula to perform. For example, the ^ (caret) operator raises a number to a power, and the * (asterisk) operator multiplies numbers.

Create a simple formula by using constants and calculation operators

Type the constants and operators that you want to use in the calculation.

Example formula

What it does

=5+2

Adds 5 and 2

=5-2

Subtracts 2 from 5

=5/2

Divides 5 by 2

=5*2

Multiplies 5 times 2

=5^2

Raises 5 to the 2nd power

Click the cell that contains the value that you want to use in the formula, type the operator that you want to use, and then click another cell that contains a value.

Example formula

What it does

=A1+A2

Adds the values in cells A1 and A2

=A1-A2

Subtracts the value in cell A2 from the value in A1

=A1/A2

Divides the value in cell A1 by the value in A2

=A1*A2

Multiplies the value in cell A1 times the value in A2

=A1^A2

Raises the value in cell A1 to the exponential value specified in A2

Press ENTER.

Tips

You can enter as many constants and operators as you need to achieve the calculation result that you want.

Excel follows the standard order of mathematical operations. For example, the formula =5+2*3, multiplies two numbers and then adds a number to the result – the multiplication operation (2*3) is performed first, and then 5 is added to its result.

Create a formula by using cell references and names

The example formulas at the end of this section contain relative references to and names of other cells. The cell that contains the formula is known as a dependent cell when its value depends on the values in other cells. For example, cell B2 is a dependent cell if it contains the formula =C2.

Click the cell in which you want to enter the formula.

In the formula bar , type = (equal sign).

Do one of the following:

To create a reference, select a cell, a range of cells, a location in another worksheet, or a location in another workbook. This behavior is called semi-selection. You can drag the border of the cell selection to move the selection, or drag the corner of the border to expand the selection.

1. The first cell reference is B3, the color is blue, and the cell range has a blue border with square corners.

2. The second cell reference is C3, the color is green, and the cell range has a green border with square corners.

Note If there is no square corner on a color-coded border, the reference is to a named range.

To enter a reference to a named range, press F3, select the name in the Paste name box, and click OK.

Example formula

What it does

=C2

Uses the value in the cell C2

=Sheet2!B2

Uses the value in cell B2 on Sheet2

=Asset-Liability

Subtracts the value in a cell named Liability from the value in a cell named Asset

Create a formula by using a function

Click the cell in which you want to enter the formula.

To start the formula with the function, click Insert Function on the formula bar .

Select the function that you want to use.

You can enter a question that describes what you want to do in the Search for a function box (for example, "add numbers" returns the SUM function), or browse from the categories in the Or Select a category box.

Create a formula by using nested functions

Nested functions use a function as one of the arguments of another function. You can nest up to 64 levels of functions. The following formula sums a set of numbers (G2:G5) only if the average of another set of numbers (F2:F5) is greater than 50. Otherwise, it returns 0.

1. The AVERAGE and SUM functions are nested within the IF function.

Click the cell in which you want to enter the formula.

To start the formula with the function, click Function Wizard on the formula bar .

Select the function that you want to use.

You can enter a question that describes what you want to do in the Search for a function box (for example, "add numbers" returns the SUM function), or browse from the categories in the Or Select a category box.

To enter cell references as an argument, click Collapse Dialog next to the argument you want (which temporarily hides the dialog box), select the cells on the worksheet, and then press Expand Dialog.

To enter another function as an argument, enter the function in the argument box that you want. For example, you can add SUM(G2:G5) in the Value_if_true edit box of the IF function.

The parts of the formula displayed in the Function Arguments dialog box reflect the function that you selected in the previous step. For example, if you clicked IF, the Function arguments dialog box displays the arguments for the IF function.

Create an array formula that calculates a single result

You can use an array formula to perform several calculations to generate a single result. This type of array formula can simplify a worksheet model by replacing several different formulas with a single array formula.

Click the cell in which you want to enter the array formula.

Enter the formula that you want to use.

Tip Array formulas use standard formula syntax. They all begin with an equal sign, and you can use any of the built-in Excel functions in your array formulas.

For example, the following formula calculates the total value of an array of stock prices and shares, without using a row of cells to calculate and display the total values for each stock.

Array formula that produces a single result

When you enter the formula {=SUM(B2:C2*B3:C3)} as an array formula, Excel multiples the number of shares by the price for each stock (500*10 and 300*15), and then adds the results of those calculations together to get a total value of 9500.

Note Manually typing braces around a formula will not convert it into an array formula — you must press CTRL+SHIFT+ENTER to create an array formula.

Important Any time you edit the array formula, the braces ({ }) disappear from the array formula, and you must press CTRL+SHIFT+ENTER again to incorporate the changes into an array formula and to add the braces.

Create an array formula that calculates multiple results

Some worksheet functions return arrays of values, or require an array of values as an argument. To calculate multiple results by using an array formula, you must enter the array into a range of cells that has the same number of rows and columns as the array arguments have.

Select the range of cells in which you want to enter the array formula.

Enter the formula that you want to use.

Tip Array formulas use standard formula syntax. They all begin with an equal sign, and you can use any of the built-in Excel functions in your array formulas.

For example, given a series of three sales figures (column B) for a series of three months (column A), the TREND function determines the straight-line values for the sales figures. To display all of the results of the formula, it is entered into three cells in column C (C1:C3).

Array formula that produces multiple results

When you enter the formula =TREND(B1:B3,A1:A3) as an array formula, it produces three separate results (22196, 17079, and 11962), based on the three sales figures and the three months.

Note Manually typing braces around a formula will not convert it into an array formula — you must press CTRL+SHIFT+ENTER to create an array formula.

Important Any time you edit the array formula, the braces ({ }) disappear from the array formula, and you must press CTRL+SHIFT+ENTER again to incorporate the changes into an array formula and to add the braces.

Learn tips and tricks about creating formulas

When you work with formulas, it’s good to know how you can easily change the type of reference the formula is using, copy formulas to other cells in the worksheet, avoid formula errors by using Formula Autocomplete, and take advantage of Function Screen tips that are provided for each function to learn more about the formula arguments.

Quickly copy formulas to other cells

You can quickly enter the same formula into a range of cells. Select the range that you want to calculate, type the formula, and then press CTRL+ENTER. For example, if you type =SUM(A1:B1) in range C1:C5, and then press CTRL+ENTER, Excel enters the formula in each cell of the range, using A1 as a relative reference.

Use Formula Autocomplete

To make it easier to create and edit formulas and minimize typing and syntax errors, use Formula Autocomplete. After you type an = (equal sign) and beginning letters, Excel displays a dynamic list of valid functions and names below the cell. After you insert the function or name into the formula by pressing TAB or double-clicking the item in the list, Excel displays any appropriate arguments. As you fill out the formula, typing a comma can also display additional arguments. You can insert additional functions or names into your formula and, as you type their beginning letters, Excel again displays a dynamic list from which you can choose.

Use Function ScreenTips

If you are not familiar with the arguments of a function, you can use the function ScreenTip that appears after you type the function name and an opening parenthesis. Click the function name to view the Help topic on the function, or click an argument name to select the corresponding argument in your formula.

Avoid common errors when creating formulas

The following table summarizes some of the most common mistakes you can make when entering a formula and how to avoid formula errors:

Make sure that you…

More information

Match all open and close parentheses in the formula

All parentheses are part of a matching pair in formulas. When you create a formula, Excel displays parentheses in color as they are entered.

Use a colon to indicate a range you enter in the formula

Colons (:) are used to separate the reference to the first and last cell in the range. For example, A1:A5.

Enter all required arguments

Functions can have required and optional arguments (indicated by square brackets in the syntax). All required arguments should be entered. Also, make sure that you have not entered too many arguments.

Do not nest more than 64 functions in a formula

Nesting functions within a formula is limited to 64 levels.

Enclose workbook or worksheet names in single quotation marks

When referring to values or cells on other worksheets or workbooks that have non-alphabetical characters in their names, the names must be enclosed in single quotation marks ( ' ).

Include the path to external workbooks

External references must contain a workbook name and the path to the workbook.

Enter numbers without formatting

Numbers you enter in a formula should not be formatted with decimal separators or dollar signs ($) because commas are already used as argument separators in formulas, and dollar signs are used to mark absolute references. For example, instead of entering $1,000, enter 1000 in the formula.